Legg Mason Posts Loss But Stock Rises

The investment firm Legg Mason posted a second-quarter loss on Wednesday as revenue dropped and the market meltdown lead to a massive charge related to shoring up its money market funds.

The Baltimore-based asset manager reported a loss of $103.8 million, or 74 cents per share, in the quarter-ended Sept. 30 compared to net income of $177.5 million, or $1.23 per share, during the same period a year ago. For the quarter, revenues were $966 million, down 18 percent from $1.17 billion in the second quarter of 2008.

Legg Mason said that the loss was principally due to $191.1 million in losses the company took from shoring up its money market funds. Market declines also resulted in additional pre-tax losses of $38.6 million, the company said. The company's assets under management declined 17 percent to $841.9 billion during the quarter, from $1.012 trillion in the comparable period one year ago, further pushing revenue down.

"As a team we are not satisfied with where we are. Over the quarter we have worked very hard to sharpen our strategy." Mark R. Fetting, president and chief executive, said in a statement. He added, "we have identified significant cost savings that will be implemented between now and fiscal year end that will make us leaner and meaner."

He also noted that the firm appears to be weathering the market turmoil better than many competitors. The decline in its assets under management was less than some rivals and "unlike several of our competitors, our liquidity funds had net inflows for the quarter."

Investors seemed to like what they heard. The stock was up $4.32 or 33 percent to $17.30 in mid-day trading.